When Should I Refinance My Student Loans?

When I was 17, I was accepted to the honors program in a college that I wanted to go to, full scholarship. I got engaged and turned down the scholarship and moved abroad to get married, and haven't been to college (other than my one year that I did simultaneously with high school). I don't have any student loans from college, and even if I had gone, I probably wouldn't have had loans because of my scholarship... but I know how much student loans can take a toll on your finances, as my entire childhood, it seems, my parents were paying off their student loans. Even with a larger income, student loans can eat away at so much of your salary, so that you end up needing to be frugal to get by. I don't envy people with student loans, and hopefully this post by a reader will give you some information on refinancing your student loans, hopefully in a way that makes sense for your situation and will improve your finances.

If you are someone trying to live a frugal lifestyle, student loans can be a burden on your finances. The first thing you should know, is that you’re not alone in this struggle. According to the 2017 Report on the Economic Well-Being of U.S. Households, 37% of adults between ages 18-29 have outstanding student loan debt.

Student loans can be a major source of financial stress. Fortunately, there are options available. People are refinancing their loans and reaping some great benefits along the way. Let’s find out if it’s time to refinance your loans. You can use this student loan refinance calculator to get an overview of how much you can save by refinancing your student loans.

3 Immediate Potential Benefits of Refinancing Your Loan Debt

Ideally, we would all be happiest if our debt would go away, but that’s not an option. By refinancing your loans, you can take advantage of some immediate benefits:

  • Lower Interest Rate - By combining your loans into one payment each month, you can have a lower interest rate. More of your monthly payment will go toward the principal loan debt, as opposed to interest.
  • Lower Monthly Payment - If you refinance with a longer repayment term, the monthly payment will be less.
  • Maximize Your Long-Term Savings - A shorter repayment term results in lower interest rates. This will save you more money over the life of the loan.

Federal loans also offer their own alternative repayment options. For private loans, you can refinance through some of the top lenders.

When Is the Right Time to Refinance?

Refinancing could be a great solution to help relieve the pressure of your student loan debt. With that pressure lifted, you could finally take that trip you’ve always been planning. Take a look at the infographic below for some advice on how to decide if refinancing is right for you.

See my disclaimer.

Penniless Parenting

Mommy, wife, writer, baker, chef, crafter, sewer, teacher, babysitter, cleaning lady, penny pincher, frugal gal

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